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Summary

The American government has been both miracle worker and villain in the developing world. From the end of World War II until the 1980s poor countries, including many in Africa and the Middle East, enjoyed a modicum of economic growth. New industries mushroomed and skilled jobs multiplied, thanks in part to flexible American policies that showed an awareness of the diversity of Third World countries and an appreciation for their long-standing knowledge about how their own economies worked. Then during the Reagan era, American policy changed. The definition of laissez-faire shifted from "Do it your way" to an imperial "Do it our way." Growth in the developing world slowed, income inequalities skyrocketed, and financial crises raged. Only East Asian economies resisted the strict prescriptions of Washington and continued to boom. Why? In Escape from Empire,Alice Amsden argues provocatively that the more freedom a developing country has to determine its own policies, the faster its economy will grow. America's recent inflexibility-as it has single-mindedly imposed the same rules, laws, and institutions on all developing economies under its influence-has been the backdrop to the rise of two new giants, China and India, who have built economic power in their own way. Amsden describes the two eras in America's relationship with the developing world as "Heaven" and "Hell"-a beneficent and politically savvy empire followed by a dictatorial, ideology-driven one. What will the next American empire learn from the failure of the last? Amsden argues convincingly that the world-and the United States-will be far better off if new centers of power are met with sensible policies rather than hard-knuckled ideologies. But, she asks, can it be done?

Table of Contents

Acknowledgments

p. vii

Heaven Can't Wait

p. 1

Two American empires, one presiding after World War II, onepresiding from 1980 to the present, gave rise to dramatically different growth rates in the developing world¨a Golden Age and a Dark Age.

Where the Sun Never Sets, and Wages Never Rise

p. 21

Prewar colonial empires are lauded for their spread of civilization, but manufacturing experience was acquired by only a dozen late developers, mainly in Japan's orbit.

Trading Earth for Heaven

p. 39

In the First American Empire, developing countries were allowed to follow their own development paths, as long as they stayed clear of communism.

Angel Dust

p. 55

Foreign aid failed as a lever of growth because it was ˘tied÷ ... it was corrupt ... and it was ill conceived...

Gift of the Gods

p. 73

The fathers of Third World independence understood somebig things, about the ˘imperialism of free trade÷ andpopular mass support for decent jobs

They devised original policies to promote the substitution of imports for domestic production.

The Light of the Moon

p. 87

The experimental policies that were responsible for bringing most of the developing world into the modern age were grounded in ˘performance standards,÷ a set of norms and institutions that increased the efficiency of state intervention.

Dien Bien Phu: Knowledge Is Eternal

p. 103

The First American Empire perished in Vietnam because it lacked the information, know-how, and experimentation in which savvy developing countries specialized.

To Hell in a Straw Basket

p. 115

War, oil, Japanese competition, and an expansionary Wall Street brought the Second American Empire to power, with its unshakable faith in free markets

America's Fatwas

p. 127

Ideas about development changed from innovative to ideological; a ˘Washington consensus÷ determined what developing countries could and couldn't do

Only Asia went its own way and took the world by surprise

The Devil Take the Hindmost

p. 137

Gaps in income between and within countries widened

Equal income distribution became recognized as one of the most important factors behind development, but laissez-faire was powerless to help

Great Balls of Fire

p. 149

Great Balls of Fire emerged¨China, India, and other awakening giants. If the giants prosper, the Second American Empire will no longer enjoy absolute power